Yamaha Suffers Through Rough 1st Quarter
We've reported on Harley not being the only manufacturer that's suffering, and Yamaha's first quarter results reflect more of the same unfortunate, industrywide news.
Net income for the Japanese manufacturer dropped 22.2 billion yen (or $213 million) during the first quarter of 2008 according to Bloomberg, a whopping 12% decline. The Bloomberg report quotes a senior analyst who reiterates a theme that has plagued the motorcycle industry as of late: "Demand in the U.S. for the company's products, particularly the leisure-oriented ones, are slumping."
Unlike Harley, whose 2008 lineup is heavy (no pun intended) on touring and cruising bikes, the '08 Yamaha lineup is diversfied with everything from supermotos to sportbikes to scooters.
Are any motorcycles-- aside from the minority of high-end bikes who are selling well-- immune from the vagaries of a hesitant economy? Comment with your thoughts.
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Comments
Seems like we’ve been expecting that as gasoline prices go up more people would look toward two wheels as regular transportation, but then you have to look at the economics. Say you drive 12,000 miles a year at 20 mpg. You’ll use 600 gallons of fuel at $4/gallom for a total of $2,400/yr. in fuel. Do the same on a bike at 50 mpg and you’ll use $1,000 worth of fuel. Seems like the savings would justify the expense of bike, but up north we have 4+ months of cold and snow, in the south there are 4+ months of unrelenting heat and then there are the times you have to haul more stuff or more people - all factors eroding any savings. Even at $5/gallon I don’t think that’s enough savings to bolster bike sales.
I would agree with Scottie’s comments. When you do all the math, including the purchase price of the bike and how much time you can’t ride, it would be hard to justify buying one solely because of gas prices. I think all of the motorcycle companies are going to be hurting for a while.
The sad truth of it is, 95% of motorcycle purchases are toys (that’s not the sad part) and as a result those owners, for the most part aren’t the least bit interested in fuel economy…(that’s the sad part) - and - that’s why a toy market takes a hit when times get tough.
Does anyone feel the least bit sorry for the owners of huge gas guzzling Aviators, Escalades & Hummers? Can you imagine those barges at almost 4$ a gallon?
Beside those, even my bike is economical!
I believe the reason that motorcycle companies are having trouble selling their product is because of the specialized classifications they are making available today. I personally will never own a strictly “sport/race bike” or a Harley look-alike cruiser. Whatever happened to the standards of the early to mid-80’s????? I bet most of the current baby-boomers are totally intimadated by the current selection of motorcycles on the showroom floors. There is not one motorcycle being offered today that I would even consider. I am glad I bought the 2006 Kawasaki Concours before it was no longer available.
I have to disagree with Scottie on that. Even calculating the down time, if you can ride a motorcycle to and from work buy one. You are investing into yourself and NOT the fuel company, you come out in the end with something and it is an asset. No longer are you “blowing your money out your exhaust”, you have something to show for it at the end of the month.
As long as OEMs keep doing the same old same old to attract consumers, they will continue to see falling sales.
Use my Kaw Vulcan 1600 all year round and requiring high test which costs me close to $20 to fill the 5 gal tank that was costing about $7 dollars in the good old days of 03. Use to ride 20,000 miles a year and have cut it in half. At 42-45 mpg it’s still a lot better then the town car and I can get around traffic a lot better. Looking forward to Americade in 30 days. Once the rapist figure out we can come up with alternative ways to use less of their precious gold things might change and when it starts backing up on them maybe they will find other uses like bathing in it. I hope I’m around to see the expressions on their faces when hydro fuel and hybrid electric fuel takes over. Brazil took 6 years to throw out every gas station they had and are now on ethanol type made from their abundance of sugarcane. We should be able to do it in half the time. Don’t give up and Ride Safe
Rice 1
I can’t believe how anti-Harley these comments pages are. When Harley posted a loss most of the comments say Harleys aren’t selling because they are out dated, there quality sucks or they are over priced but when Yamaha posts losses most of the comments blame the economy. Why the hate for Harleys here??
The difference between a company like Harley-Davidson and say Yamaha, is the diversity of that company. They make water sport equipment, snow mobile type things, generators, scooters, dirt bikes, ATVs, sports bikes, and cruisers, etc. When their sales are down, which department is falling short? The economy will hit the areas of least importance to folks at this time.
The Bloomberg report in this blog says “North American sales fell to 43,000 MOTORCYCLES in the 1st quarter and European sales fell 9 percent to 100,000.” No mention of generators, ATV’s, snowmobiles or watercrafts Pete. HD also sells sport bikes(Buell). These figures are comparable to HD’s.
Joe,
H-D didn’t report a loss, but a decrease in sales in N America.
H-D equity was up $200 million for Q1. Worldwide sales Q1 2008 up $125 million vs. Q1 2007. Net income for Q1 was $293 million.
They have some interesting times ahead and Wall Street isn’t happy with that, but they haven’t lost money in 20+ years. They have posted Gross Profit of 36% and Net of 18% for years - which is incredible for a manufacturing company, and also where some of the “hate” comes along. Some don’t like that H-D is getting away with selling $10k quality bikes for $18k. Also, dealers have been very arrogant.
Scottie, you are right that I made a mistake about HD having a loss. It is a decrease in sales. I can’t agree with you about HD selling $10k quality bike at $18k. HD’s are fuel injected, have self canceling turn signals, six speeds, 2 year unlimited warranty offer ABS and throttle by wire and wires hidden inside the handle bars on some models, and they have a largest aftermarket of parts. Most other motorcycle don’t have these features. I also can’t understand why someone would “hate” a company for doing well. As far as dealers being arrogant I can’t say I have ever seen that. Most HD dealerships have open houses once or twice a year where there is FREE food and entertainment and these events are not just for Harley riders but Metric and other brands as well. They also have a new thing where they have garage parties to get women into riding, again all this for FREE! I don’t see other dealers doing this.
Joe,
You make some good points.
I’m a cruiser guy, but I’m in awe with the technology one can get on a Hayabusa or Z14 for a mere $12k.
Dealers vary. I know of a family in Texas that has a couple of deaerships and they actually tag their bikes with list price and list price of accessories they’ve added. Here in the NYC area when I ask how much the $18k FLSTC is, they just toss out a figure in the $22-$23k range, for a stock bike. When challenged they back pedal and say they meant with setup and sales tax. Still doesn’t add up.
You make some great points too Scottie. I love all bikes too but the cruisers are more my liking. If you are looking for a bike to go fast and handle great at a low price you can’t beat a Metric sports bike but I don’t think you can compare them and cruisers. Apples and oranges. As for the dealerships, I live in central NJ and most dealers are good here. NYC is always HIGH priced for just about everything. May just be the area you live in.
Joe…I don’t think it’s a matter of H-D “hate”, so mach as boredom & lack of respect.
Self - canceling signals, FI, ABS, hidden wires and 6 speed transmissions are old news. Everyone else was doing that before H-D discovered starter motors!! What H-D tries to sell as bells & whistles does not = quality & value.
If H-D really wants to step up all the way up to 2008 (sorry…make that 1975) technology, maybe they could try something really innovative like liquid cooling….like the GL1000 33 years ago!
Joe,
I live on the UES in Manhattan so as you can imagine everything from housing to parking to food is practically free here. Ha. Closest H-D dealer is in Long Island City in Queens and as a female friend of mine says “it’s not the same over in Long Island City anymore, you can’t get mugged or raped no matter how careless you are”. Even the worst parts of the city are being gentrified and getting expensive.
Pete,
I really don’t like the look of radiators on cruisers.
Hey Pete,I don’t think liquid cooling makes a bike better. I have a number of friends who have very nice Metric crusiers, and their bikes are no faster or better running than my Harley or other friends who also have Harleys. There also are a lot of Metric’s still air cooled (The new Raider, Roadstar, Boulevard to name a few) As for the Metrics having FI, ABS, 6speeds and so on … First, that is true but it seems they have gone away from that stuff, and are the ones who are moving backward. I ride with people who have bikes such as VTX1300, Roadstars, M109, Indian Scout, Mean Streak, Boulevard C90, VTX1800, and V stars for example, and none or them have 6speed, Self cancel turn signals,ABS, hidden wires, ETC. Some of them do have FI (some do not) but that seems to be only because the goverment regs are making them do it. Granted they are cheaper than a HD but seems like you get what you pay for.
I think Joe works for H.D.–Harley is STILL over priced and very over rated. I ride my Yamaha Royal Star Venture to work as often as I can. It is better to put in $10.00 of gas than $30.00 of gas. T all ride them if you have a bike even the Harley people.—Hey Joe have you been laid off by Harley yet.
I don’t work for HD, just don’t understand the hate for HD’S in these posts that’s all. Hey GB, do you hate HD’s because you can’t afford one??
I was looking at the 2008 H.D. superglide on the net and it’s cheaper than the 2007,11,000 and change. The roadliner is 13 and change. Harley is cheaper than the Yamaha
Then I guess they are NOT overpriced, just a GREAT bargin because they offer more then the Metric’s like I stated in the posts above.
I like the looks of HD, but probably won’t own one any time soon. You’re right, they’re too expensive…even used. Sellers refuse to admit their bikes have depreciated.
Also…NO ABS except on their high end bikes. I’ll keep my old BMW K75, whose ABS has kicked in several times and saved my skin. Of course this is the same reason I don’t look at most Kaws, Suzs or Yams.
I ride a yamaha v-star 1100, a very nice ride by the way. I want to know where I can buy a superglide, brand new, for 11k. Aren’t 1100 sportsters starting around 12k and other than the 883 thats there low end bike, even if so 11 v-stars run around 9 k same thing c50 boulevards. Im a huge domestic fan all around and wish I hadn’t bought a jap bike but the price was right and the riding is very smooth. My next bike will be a domestic brand but it sure as hell wont be a harley, Im leaning to the better choice, victory.
The reason I wont buy HD is not because I’m anti HD. I love the history and I love going to the HD showrooms to look at the new products. The reason is because of about 90% of HD riders out there are pricks. There anti meric and think there hard because they ride an american assembled,(not to be confused with american made) vibrator. I can understand noy liking sport bike riders cuz 90% of them keep helmet laws in the spotlight, but I’m on a metric cruiser and your to good to wave or talk to me at a ralley, get bent, thats how I feel about the majority of the riders who don the seat of a harley. If you think that I’m full of it cuz you ride, wave, and talk to metric cruisers your part of the 10%. Look around next time you go out on a ride with some buddies to see if there is anything other than HD, look to see if the other guys are giving the “Im a hard ass” neck roll to other riders. If so, you should know your riding with d-bags and look for me to be giving you the finger.